The Bangko Sentral ng Ngipinas (BSP) is tightening oversight of licensed virtual asset service providers that support privacy coins under a new set of crypto regulations, aiming to mitigate the risks of money laundering, terrorist financing, and untraceable transactions.
The move applies to Virtual Asset Service Providers (VASPs) supervised by the BSP, marking the next step in the Philippines’ efforts to bring the digital asset market under the same regulatory standards as remittance and cross-border payment services.
Privacy Coins Face New Limits
The Philippines is tightening control over highly anonymous digital assets, with privacy coins becoming the most scrutinized group due to the difficulty of meeting regulators’ requirements for identity verification and transaction monitoring. For BSP-licensed VASPs, the risk lies in the fact that these tokens can conceal the sender, recipient, transaction value, or remittance history.
The mentioned group of privacy coins includes Monero (XMR), Zcash (ZEC), Dash, and assets utilizing privacy-enhancing technologies. This move does not target the entire crypto market but focuses on restricting untraceable tokens within the licensed service system.
The BSP has long warned that virtual assets can facilitate faster and cheaper money transfers but come with risks due to their high degree of anonymity, high transaction speeds, price volatility, and global accessibility.
Why VASPs Should Care
This move is notable because the Philippines is one of the major crypto markets in the region. Chainalysis ranked the country 8th in the 2024 Global Crypto Adoption Index, while personal remittances to the Philippines reached approximately $38.34 billion in 2024, equivalent to 8.3% of GDP.
For users, the most visible change is that the ability to buy and sell tokens like Monero or Zcash on licensed exchanges may be narrowed. This will not eliminate the demand for privacy coins, but it could push a portion of transactions out of monitored channels.
For crypto businesses, a license in the Philippines is no longer just a story of capital, KYC, or reporting. How VASPs select tokens for listing will also face stricter scrutiny, especially regarding untraceable assets.
The Compliance Thresholds
The BSP has set specific compliance thresholds for VASPs. According to Circular No. 1108, these entities must perform customer due diligence for transactions of ₱5,000 or above. For virtual asset transfers of ₱50,000 or above, VASPs must collect and retain information on the sender and recipient, similar to the “travel rule” requirements in international wire transfers. For payouts exceeding ₱500,000, the BSP requires enhanced due diligence and only allows payments via check, direct transfer, or account-to-account transfer.
These thresholds demonstrate why privacy coins have become a sensitive point. If a token conceals wallet addresses, transaction amounts, or the links between transactions, it becomes difficult for VASPs to fulfill their obligations to verify funds, identify beneficiaries, and detect suspicious transactions.
Impact On Local Platforms
As of May 31, 2026, the BSP recorded 11 VASPs on its published list, including notable names such as Coins.ph/Betur, Maya Philippines, PDAX, GoTyme Bank, and UnionBank. This is the group directly affected if restrictions on privacy coins are applied to listing, custody, or asset transfer activities.
For Monero or Zcash, the impact on global prices may not be significant because the Philippines accounts for only a small fraction of the trading liquidity for these tokens. But for the domestic market, this change could force licensed platforms to review their token lists, custody policies, and transaction monitoring procedures.
Monero and Zcash are also not identical in their privacy design. Zcash allows both transparent transactions and shielded transactions, while Monero defaults to concealing more information, including the sender, recipient, and amount. This difference could affect how each token is evaluated, although in compliance, they are still typically grouped under anonymity-enhanced assets.
Regulatory Context
Targeting privacy coins aligns with how the Philippines regulates crypto, as the country focuses on controlling services that connect users with fiat currency and digital assets rather than treating the entire market as a single group. Since 2024, Philippine authorities have also increased pressure on unregistered foreign crypto platforms, highlighted by the SEC’s request to block Binance for providing services to local users without a proper license.
Within this framework, the BSP focuses on regulated VASPs, while the SEC handles issues related to securities offerings, investment products, and unregistered platforms. With privacy coins, the focus shifts to the risk of each specific asset on the listing roster, rather than just whether the platform holds a license.
What To Watch Next
The extent of the impact will depend on the compliance deadlines and how the BSP defines privacy coins in its implementation guidelines. If the scope only targets tokens that are anonymous by default, Monero could be among the most clearly affected. If the definition is broader, assets with shielded transaction features or built-in mixing could also face review.
The first practical signals will come from delisting announcements or trading restrictions by domestic VASPs. Following that will be the users’ reaction, the shift in liquidity, and the potential for authorities to continue pressuring unregistered offshore platforms.
Credit: Source link
